Coming soon: Health costs up

The tax and spending legislation the House voted to send to President Donald Trump’s desk on July 4, enacting much of his domestic agenda, cuts federal health spending by about $1 trillion over a decade in ways that will jeopardize the physical and financial health of tens of millions of Americans.

The bill, passed in both the House and the Senate without a single Democratic vote, is expected to reverse many of the health coverage gains of the Biden and Obama administrations. Their policies made it easier for millions of people to access health care and reduced the U.S. uninsured rate to record lows, though Republicans say the trade-off was far higher costs borne by taxpayers and increased fraud. Under the legislation, reductions in federal support for Medicaid and Affordable Care Act marketplaces will cause nearly 12 million more people to be without insurance by 2034, the Congressional Budget Office estimates. That in turn is expected to undermine the finances of hospitals, nursing homes, and community health centerswhich will have to absorb more of the cost of treating uninsured people. Some may reduce services and employees or close altogether.

Here’s how it may affect health care access.

Need Medicaid? Get a job The deepest cuts to health care spending come from a proposed Medicaid work requirement, which is expected to end coverage for millions of enrollees who do not meet new employment or reporting standards.

In 40 states and Washington, D.C., all of which have expanded Medicaid under the Affordable Care Act, some Medicaid enrollees will have to regularly file paperwork proving that they are working, volunteering, or attending school at least 80 hours a month, or that they qualify for an exemption, such as caring for a young child. The new requirement will start as early as January 2027.

The reauirement doesn’t applv to the 10 largely GOPled states that have not expanded Medicaid to nondisabled adults.

Health researchers say the policy will have little impact on employment. Most working-age Medicaid enrollees who don’t receive disability benefits already work or are looking for work, or are unable to do so because they have a disability, attend school, or care for a family member, according to KFF, a health information nonprofit that includes KFF Health News.

State experiments with work requirements have been plagued with administrative issues, such as eligible enrollees’ losing coverage over paperwork problems, and budget overruns. Georgia’s work requirement, which launched in 2023, has cost more than $90 million, with only $26 million spent on health benefits, according to the Georgia Budget & Policy Institute, a nonpartisan research organization.

“‘The hidden costs are astronomical,” said Chima Ndumele, a professor at the Yale School of Public Health.

Less cash, care in rural areas Belt-tightening that targets states could translate into fewer health services, medical professionals, and even hospitals, especially in rural communities.

The GOP plan curtails a practice, known as provider taxes, that nearly every state has used for decades to increase Medicaid payments to hospitals, nursing homes, other providers and private managed-care companies.

States often use federal money generated through the taxes to pay the institutions more than Medicaid would otherwise pay. Medicaid generally pays lower fees for care than Medicare, the program for people over 65 and some with disabilities, and private insurance. But thanks to provider taxes, some hospitals are paid more under Medicaid than Medicare, according to the Commonwealth Fund, a health research nonprofit.

Hospitals and nursing homes say they use these extra Medicaid dollars to expand or add new services and improve care for all patients.

Rural hospitals typically operate on thin profit margins and rely on payments from Medicaid taxes to sustain them. Researchers from the Cecil G. Sheps Center for Health Services Research who examined the original House version of the bill concluded it would push more than 300 rural hospitals many of them in Kentucky, Louisiana, California, and Oklahoma toward service reductions or closure.

Senate Republicans tacked a $50 billion fund onto the legislation to cushion the blow to rural hospitals. The money will be distributed starting in 2027 and continue for five years.

Harder to get, and keep, ACA coverage For those with Obamacare plans, the legislation will make it harder to enroll and to retain coverage.

ACA marketplace policyholders will be required to update their income, immigration status, and other information each year, rather than be allowed to automatically reenroll - something more than 10 million people did this year. They'll also have less time to enroll by about a month.

People applying for coverage outside that period for instance because they lose a job or need to add a newborn or spouse to an existing policy will have to wait for all their documents to be processed before receiving government subsidies to help pay their monthly premiums.